MANJU KAMAL NAGDEV,ULHASNAGAR vs. INCOME TAX OFFICER WARD 2(2), KALYAN, KALYAN

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ITA 3813/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2019-208 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal, deleting the addition of ₹2,50,00,000 made by the Assessing Officer under section 69A and confirmed by the CIT(A). The Tribunal noted that the factual matrix was identical to a coordinate bench decision in Sanjeet Kumar Kedarnath Gupta v. ITO. The Tribunal found that the assessee's name did not appear in the seized Excel sheet. The agreement value in the Excel sheet was stated as ₹3,00,00,000, while the registered agreement value was ₹2,50,00,000, making the derived on-money figure unreliable. The assessee held only a 25% share as a co-owner, yet the AO added 100% of the alleged on-money, indicating a lack of application of mind. Section 69A could not be invoked as no asset or money was found in the assessee's possession. Expecting the assessee to provide negative proof was legally invalid. Furthermore, reassessment for AY 2018-19 on the same search material was dropped by the department, invoking the rule of consistency and judicial discipline. The Tribunal held that the addition made on raw, uncorroborated third-party data without independent inquiry could not be sustained.

What were the facts?

The assessee, Manju Kamal Nagdev, filed an appeal against the order of the CIT(A), NFAC, Delhi, which upheld the assessment order passed by the Income Tax Officer, Ward 2(2), Kalyan, under section 143(3) r.w.s 147 of the Income-tax Act, 1961, for Assessment Year 2019-20. The reassessment proceedings were initiated based on information shared by the office of Central Circle 6(1), Mumbai, regarding a search and seizure action under section 132 in the case of GNP Group. Loose sheets and digital evidence seized from GNP Group led to the issuance of a notice under section 148A(b). An order under section 148A(d) was passed, followed by a notice under section 148. The assessee filed a return of income, and the reassessment was completed with an addition of ₹2,50,00,000 under section 69A as unexplained money towards alleged on-money payment for property purchase. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the Assessing Officer erred in passing an order under section 148A(d) and issuing a notice under section 148 beyond the period of 3 years without the approval of the Principal CIT as per section 151(ii) of the Income-tax Act, 1961, rendering the proceedings untenable. 2. Whether the Assessing Officer erred in making an addition of ₹2,50,00,000 for AY 2019-20 based on an Excel sheet dated 11/04/2019, which pertains to FY 2019-20 (AY 2020-21), without properly examining the seized material. 3. Whether the Assessing Officer erred in making an addition based on 'dumb papers' where the appellant's name does not appear. 4. Whether the Assessing Officer erred in invoking the presumption under section 132(4A) against a third party (the assessee) based on documents seized from someone else, contrary to the rulings in Straptex (India) (P.) Ltd vs DCIT and Padmashree Dr. D.Y. Patil University V/s DCIT. 5. Whether the Assessing Officer erred in completing the assessment without providing an opportunity for cross-examination of persons whose statements were relied upon, violating principles of natural justice. 6. Whether the Assessing Officer erred in treating the entire alleged amount of ₹2,50,00,000 as 'On Money' paid by the appellant, when the appellant was a co-owner with a 25% share in the property. 7. Whether the Assessing Officer and CIT(A) erred in ignoring the fact that the assessee's assessment for AY 2018-19 was completed by accepting the return of income, thereby failing to follow the doctrine of judicial discipline. 8. Whether the Assessing Officer erred in concluding that the appellant had not produced documentary evidence to prove she did not pay any ON MONEY, expecting a negative proof. 9. Whether the Assessing Officer erred in making an addition of ₹2,50,00,000 under section 69A based solely on alleged documents seized from a third party without corroborative evidence. Assessee's Contentions: The assessee argued that the reassessment proceedings were invalid due to lack of approval under section 151(ii). The addition was based on an Excel sheet from a third party, where the assessee's name did not appear, and the date of the sheet suggested it was for a different assessment year. The AO shifted stances on the amount of on-money. The presumption under section 132(4A) cannot be applied to third parties. Principles of natural justice were violated by not allowing cross-examination. The addition of the full amount was incorrect as the assessee was a co-owner with a 25% share. The AO ignored the accepted return for AY 2018-19, violating judicial discipline. Expecting negative proof was illogical. The addition under section 69A lacked corroborative evidence. The assessee relied on the decision in Sanjeet Kumar Kedarnath Gupta v. ITO. Revenue's Contentions: The judgment does not record specific contentions made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148A(b),Section 148A(d),Section 148,Section 151(ii),Section 132(4),Section 132(4A),Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

For Respondent: Smt. Sujatha Iyyanger, Sr. DR
Pronounced: 23.09.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: E BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 3813/MUM/2026 (िनधा�रण वष�/Assessment Year: 2019-20) Manju Kamal Nagdev Income Tax Officer Ward 2(2), Block No. C - 672, Room No. 1344, Kalyan 2nd Floor, Ulhasnagar, Mohan Plaza, Wayle Nagar, Kalyan-421004, Swananad Colony, Vs. Maharashtra Gandhar Nagar, Khadakpada, Kalyan-421301, Maharashtra अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAIPN7865L

अपीलाथ� �ारा/Appellant represented by: Shri Mohit S. Makhija, Advocate ��थ� �ारा/Respondent represented by: Smt. Sujatha Iyyanger, Sr. DR

सुनवाई की तारीख / Date of conclusion of hearing: 01.07.2026 घोषणा की तारीख / Date of pronouncement: 23.09.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by assessee is against the order of the ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi, Order No. ITBA/NFAC/S/250/2025-26/1084805864(1) dated 15.01.2026 passed against the assessment order by Income Tax Officer Ward 2(2), Kalyan, u/s. 143(3) r.w.s 147 of the Income-tax Act, 1961 (‘the Act’) dated 25.03.2025, for Assessment Year 2019-20.

2.

Grounds of appeal raised by the assessee are as under:

1.

The Hon’ble CIT(A) has failed to appreciate the fact that the Ld. Assessing Officer has erred in passing an order u/s 148A(d) of the I.T. Act,1961, dated 04/04/2023 and issuing notice u/s 148 of the I.T. Act,1961, dated 13/04/2023 (i.e. beyond period of 3 years) without the approval of Hon’ble PCCIT as per provisions of section 151(ii) of the I.T. Act, 1961, making the same untenable in the eyes of law. 2. The Hon’ble CIT(A) has failed to appreciate the fact that the Ld. Assessing officer has erred in making addition of Rs. 2,50,00,000/- in A.Y 2019-20 (F.Y 2018-19), without even having gone through the very seized material on the basis of which the addition has been made i.e an excel sheet dated 11/04/2019, copy of which has been provided / shared by the Ld. Assessing officer along with notice u/s 148A(b) of the I.T Act, 1961 (i.e the copy of letter dated 16/03/2023) issued by the office of Hon’ble DCIT, Central Circle 6(1), Mumbai addressed to the respective JAO’s, which itself mentions the sheet to be dated 11/04/2019, (i.e. F.Y. 2019-20, relevant to A.Y. 2020-21). 3. The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing officer has failed in appreciating the fact that on the alleged seized paper nowhere appellant’s name is appearing and as such on the basis of said dumb papers no adverse inference is called for in the case of appellant. 4. The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing officer has erred in holding that appellant had paid ON MONEY amounting to Rs. 2,50,00,000/-, without appreciating the fact as well as law that presumption drawn u/s 132(4A) of the I.T Act, 1961 that the seized material found was presumed to be true was in respect of person from whose possession the said document is found / seized, but cannot be invoked in regard to third party as has been held by Hon’ble ITAT Bench “B” Mumbai in the case of Straptex (India) (P.) Ltd vs DCIT (84 ITD 320) and by Hon’ble ITAT, Bench C Mumbai, in the case of Padmashree Dr. D.Y. Patil University V/s DCIT, CC-7(1) in ITA No 3264 to 3268/Mum/2022 and various other higher judicial forums. 5. The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing officer has erred in completing the assessment without having provided an opportunity of Cross Examination of the persons whose statements have been relied upon thereby having completed the assessment not only against the provisions of law but in violation of principles of natural justice. 6. The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing officer has erred in arriving at the conclusion of treating the entire alleged amount of Rs. 2,50,00,000/- as ‘On Money’ paid by the appellant, without appreciating the facts and circumstances of the case in as much as there were five co-owners of shop and appellant was co-owner @25%, and as such by no iota of imagination entire alleged amount of Rs. 2,50,00,000/- could have been brought to tax in the hands of appellant. 7. On facts and circumstances of the case the Hon’ble CIT(A) has erred in not appreciating the fact that the Ld. Assessing Officer has failed to follow the doctrine of judicial discipline (i.e. in spite of appellant having placed on record the fact of her assessment for A.Y. 2018-19, having been completed by accepting the Return of Income, the Ld. Assessing Officer and Hon’ble CIT(A) has simply ignored the same which in fact ought to have been followed as per doctrine of judicial discipline.

8.

The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing officer has erred in drawing conclusion that appellant had not produced any documentary evidence in support of her contention that she had not paid any ON MONEY, without appreciating the fact that the Ld. Assessing officer was expecting appellant to submit a negative proof i.e. proof of an act which was never performed by appellant which was not only illogical, but practically not possible. Without prejudice to above, appellant submits that 9. The Hon’ble CIT(A) has failed to appreciate that the Ld. Assessing Officer erred in making addition of Rs. 2,50,00,000 under section 69A of the I.T. Act, 1961, merely on the basis of alleged documents stated to have been seized from the premise of a third party, without bringing on record any cogent corroborating evidences to substantiate the allegation levied on appellant. 10. The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time/ before the hearing of the appeal. 11. The appellant therefore prays that the notice issued u/s 148 of the I.T. Act, 1961, and consequential assessment order passed not being in accordance with the provisions of law, deserves to be and may please be annulled and/or the additions made by the Ld. Assessing officer may please be deleted and obliged.

2.

Facts of the case and chronology of events which transpired in the case of assessee are that assessee filed her return of income on 25.06.2019, reporting total income at ₹5,25,430. Information was shared through Insight Portal by office of Central Circle 6(1), Mumbai vide letter dated 16.03.2023 stating that search and seizure action under section 132 was carried out on 23.09.2021 in the case of GNP Group. In the course of search action, certain loose sheets and digital evidence were seized. Based on this information, ld. AO initiated reassessment proceedings by issuing notice under section 148A(b) dated 21.03.2023. Order under section 148A(d) was passed on 04.04.2023 and notice under section 148 was issued on 04.04.2023. In response, assessee filed return of income on 13.04.2023, reporting total income at ₹5,25,430. Reassessment was completed by making an addition of ₹2,50,00,000 under section 69A as unexplained money towards alleged payment of on-money for purchase of property. Aggrieved, assessee went in appeal before ld. CIT(A), who dismissed the appeal. Aggrieved, assessee is in appeal before the Tribunal.

3.

During the course of hearing, ld. Counsel for the assessee submitted a detailed narrative pointing out factual discrepancies in show cause notices issued and replies given, as well as the assessment order. Notice under section 148A(b) dated 31.03.2023 alleged payment of on-money of ₹2,50,00,000. Order under section 148A(d) dated 04.04.2023 stated the alleged on-money payment to be ₹1,50,00,000. Notice under section 142(1) dated 11.07.2024 again alleged on-money payment of ₹1,50,00,000. Thereafter, show cause notice dated 17.02.2025 proposed addition of ₹20,00,000. Subsequently, another show cause notice dated 11.03.2025 changed the alleged amount to ₹2,50,00,000. These shifting stances show that ld. AO was unsure of the exact amount and acted without independent application of mind. Ld. Counsel drew our attention to a detailed table in the written submission dealing with each issue on addition made by ld. AO in reassessment proceedings. Basis of addition is a scanned copy of seized material found during search action in GNP Group. Enlarged copy of this Excel sheet is placed in paper book and extracted below for ready reference:

COMMERCIAL BUILDING DATA SHEET

Code Name Status Total Agreement Receipt Balance Saleable Area (Sq.Ft) A S N S N Total S N Total G-1A Punit Sold 1209 1,34,97,000 60,00,000 74,97,000 - - 40,00,000 60,00,000 34,97,000 94,97,000 Malhotra - - - 1196 1,34,97,000 - 74,97,000 - - 90,00,000 60,00,000 14,97,000 3,21,00,000 - Total - 4267 5,71,00,000 2,71,00,000 2,50,00,000 - - 2,50,00,000 3,00,00,000 21,00,000 44,97,000 G-18 Sudam Sold 629 76,07,668 32,07,668 44,00,000 - - 76,00,000 44,00,000 - 7,668 Rasal 43,92,332 G-19 Sudam Sold 635.8 76,92,332 44,50,000 32,42,332 - - 71,00,000 44,50,000 - 5,92,332 Rasal 38,57,668 G-20 Sudam Sold 1275 1,53,00,000 89,30,000 63,70,000 - - 1,43,00,000 89,30,000 - 10,00,000 Rasal 79,30,000 G-21 yakub Reserved 1275 - - - - - - - - - G-22 Naresh Sold 1275 1,40,25,000 60,00,000 80,25,000 51,33,928 - 83,25,000 8,66,072 -3,00,000 5,66,072 Narsing G-23 Naresh Sold 1275 1,40,25,000 60,00,000 80,25,000 51,33,928 - 83,25,000 8,66,072 -3,00,000 5,66,072 Narsing G-24 Sai Baba Sold 1275 1,40,25,000 60,00,000 80,25,000 - - 1,35,00,000 60,00,000 - 5,25,000 Dress 54,75,000 G-25 Sai Baba Sold 1275 1,40,25,000 60,00,000 80,25,000 - - 1,35,00,000 60,00,000 - 5,25,000 Dress 54,75,000 - - Sold 629 94,35,000 42,26,482 52,08,518 - 24,12,500 51,85,000 18,13,962 -23,518 18,37,500 G-29 Nain Sold 635.8 94,35,000 42,73,518 51,61,482 - 24,12,500 51,85,000 18,61,018 -23,518 18,37,500 Katan - - - 1276 1,40,25,000 45,20,000 95,05,000 - 1,67,50,000 1,72,75,000 39,95,000 - -32,50,000 72,45,000 G-31 Sanjiv Sold 1275 1,40,25,000 45,20,000 95,05,000 - 1,05,00,000 1,40,25,000 9,95,000 -9,95,000 - Gupta G-32 kameroon Sold 1275 1,40,25,000 45,20,000 95,05,000 - 1,15,00,000 1,40,25,000 19,95,000 - - 19,95,000 G-33 Yogesh - 1275 1,40,25,000 45,20,000 95,05,000 - 1,36,00,000 1,36,00,000 45,20,000 - 4,25,000 Chawla 40,95,000 G-34 Ekta Sold 1275 1,91,25,000 80,40,000 1,10,85,000 - 1,01,00,000 1,51,00,000 30,40,000 -85,000 49,25,000 Hardware G-35 Suresh K Sold 1275 1,40,25,000 65,30,000 74,95,000 - 65,25,000 75,00,000 5,000 -5,000 - Moti - - Sold 1275 1,40,25,000 70,30,000 69,95,000 - 60,25,000 1,40,25,000 10,05,000 - - 10,05,000 G-38 Deepak Sold 1275 1,40,25,000 60,00,000 80,25,000 51,33,929 86,25,000 1,37,58,929 8,66,071 6,00,000 2,66,071 Kukreja G-39 Deepak Sold 1275 1,40,25,000 60,00,000 80,25,000 51,33,929 80,25,000 1,31,58,929 8,66,071 - 8,66,071 Kukreja

4.

A registered deed in respect of purchase made by assessee under co-ownership of five owners, with assessee having 25% share, is placed on record. Scanned copy of Index-II forming part of registered deed is extracted below:

5.

On the same set of facts and same excel sheet found during search in GNP Group, reopening was initiated for AY 2018-19 for purchase of another shop. Reassessment for AY 2018-19 was completed under section 147 read with section 144B vide order dated 28.03.2023. The proposed addition of ₹70,25,000 paid to GNP Group was dropped. Return of income was accepted.

6.

Relevant reasons given in the assessment order are extracted below for ready reference: “3.4. Reasons for inference drawn that no variation is required on this issue. The detailed reply uploaded by the assessee on different dates in respect of the notices/explanation/clarification letters issued from time to time has been perused. Copy of ITR, Computation of Income, bank details, sale deed (purchase consideration), copy of bank statement, details of payments, copy of Statement of Bank a/c of Mr. Kamal C. Nagdev & HUF & Joint a/c of Kamal with Heena Nagdev & Master Wines Prop. Kamal C. Nagdev, Copy of ITR of Kamal C. Nagdev & HUF for A.Y.2017-18 & 2018-19, Detailed Statement of loans & own Contribution for purchase of Co-Ownership Shop and other relevant supporting details and information filed have been carefully examined and duly verified and found to be in order. In consideration, the reply and the documents uploaded in support of the claim of the assessee, returned income as disclosed by the assessee is hereby accepted.”

7.

Similar issue with similar factual position arising from same search in GNP Group came up before coordinate bench in Sanjeet Kumar Kedarnath Gupta v. ITO in ITA No. 6933/MUM/2025, order dated 13.05.2026, authored by the undersigned Accountant Member. Observations from para 4 to para 5.5 of coordinate bench order are reproduced below: “4. We have heard the rival contentions and perused the material available on record. The principal basis for initiating reassessment proceedings and making the addition under section 69A is an Excel sheet recovered during the search under section 132 in the case of GNP Group. 5. First, we address the applicability of section 69A of the Act. Section 69A applies when an assessee is found to be the owner of any money, bullion, jewellery or other valuable article, and such assets are not recorded in books of account. In the present case, no cash or valuable asset was found in possession of assessee. The document relied upon is an unverified digital sheet seized from a third party. Assessee is neither author nor custodian of said document. 5.1 Second, ld. AO has proceeded on the footing that assessee failed to produce evidence showing that he did not pay on-money. It is a well-settled principle that law does not compel a person to prove a negative fact. Expecting assessee to provide proof of an act never performed is legally untenable. 5.2 Third, name of assessee does not appear on the seized document. Ld. AO recorded a factually incorrect finding that assessee's name appears on the Excel sheet. Addition cannot be sustained on third-party loose sheets lacking corroborative evidence. 5.3 Fourth, statements recorded under section 132(4) of third parties were relied upon without providing opportunity of cross-examination. This violates principles of natural justice and renders reliance on such statements impermissible. 5.4 Fifth, property was purchased under co-ownership. Ld. AO made 100% addition in the hands of one co-owner without examining contribution of other co-owners. This demonstrates total non-application of mind. 5.5 In view of these findings, addition made on raw, uncorroborated third- party data without independent inquiry cannot be sustained.”

8.

Applying the findings of coordinate bench to the present case, it is noted that factual matrix is identical. Assessee's name does not appear anywhere in seized Excel sheet. Agreement value in Excel sheet is stated as ₹3,00,00,000, whereas actual registered agreement value as per Index-II is ₹2,50,00,000. On-money figure was derived as a balancing figure. When underlying agreement value in sheet is incorrect, balancing figure automatically fails. Assessee holds only 25% share as co-owner. Ld. AO added 100% alleged on-money of ₹2,50,00,000 in hands of assessee. This shows lack of application of mind. Provisions of section 69A cannot be invoked as no asset or money was found in possession of assessee. Expecting assessee to submit negative proof is legally invalid. On same search material, reassessment for AY 2018-19 was dropped by department. Rule of consistency and judicial discipline applies. In view of the aforesaid facts and judicial precedent, addition of ₹2,50,00,000 made by ld. AO under section 69A and confirmed by ld. CIT(A) is hereby deleted.

9.

In the result, appeal filed by assessee is allowed.

Order pronounced in the open court on 23 September, 2026.

Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member Accountant Member Dated: 23 September, 2026 MP, Sr. PS Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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